The finance ministry today said it expects investment to the tune of $13 billion (about Rs 85,000 crore) in infrastructure through the National Investment and Infrastructure Fund (NIIF). “We have established NIIF. That is our first experience in trying to use the sovereign wealth. We (government) put out $3 billion in NIIF,” Economic Affairs Secretary S C Garg said at an event here. “We (would) raise the equal or higher amount from other participants, sovereign wealth funds, pension funds, other private sector participants to raise a corpus of about $7-8 billion, and then the co-investment will also come in, so we expect about $12-13 billion in investments in infrastructure mobilised through NIIF,” he said. The government is also thinking of more such innovative instruments to fund iconic, national level infrastructure, garg said. He further said, the other thing taking shape now is to monetise the mature assets built through public money and utilise the proceed for newer projects. “Lot of public assets which are yielding regular kind of return, it is possible to free up invested resources thereby converting them using the InVit (Infrastructure Investment Trust) model…so matured assets can be transfered to trusts,” the secretary said.

Citing example of Air India, he said, the government is in the process of selling its stake in the government-owned airline to private sector. Emphasising that there is a huge fund requirement for infrastructure development, Garg said, the investment coming from the public sector is now over 3 per cent but the need is far more. “Therefore, we are looking for newer means for financing infrastructure,” he said, adding big money lies with a lot of pension funds.

“So how do we get them interested to invest, and therefore we are looking at a number of ways, policy on permitting FPIs, policy on AIF (Alternative Investment Funds)…So that is the area where we are trying to work. In short, in financing, these are the major issues and developments,” he said.

To meet the funding requirement, infrastructure trusts, debt funds are being set up, he said, adding that small issues in Real Estate Investment Trusts (ReITs) will be sorted out soon to make it major financial instrument. He also said that banks funded infrastructure in a big way between 2008 and 2013 though many investments, which turned out to be less than robust and resulted in accumulation of huge non-performing assets.